SPX500 might be close to a major top around 4365

Written by Finacademy.io

July 9, 2021

Technical Analysis:

SPX500 had reversed sharply lower from 4365 levels yesterday before finding support around 4280 mark. The indice might have carved a meaningful top or could be close to carving one before turning lower again. Bears might be back in control soon.

Looking at the wave structure, the indice has completed 5 waves from its March 2021 lows around 3700 levels. Furthermore, the above 5th wave is terminating at multiple degrees hence probability for a much deeper correction remains high.

Also note that SPX500 has dropped back below its Elliott Channel resistance line printing a low around 4280 yester. It is testing the backside of support turned resistance trend line and expected to resume lower from here.

If the above structure is correct, SPX500 might witness a strong bearish reversal towards 4150 mark in the next few trading sessions. Alternately, if prices push above 4365 levels, a shallow top might form towards 4375.80 zone.

Either from here or just above 4365 levels, SPX500 might be preparing for a major reversal lower. Please note that potential remains for a continued drop towards 4035 and 4000 mark going forward. Aggressive traders might initiate fresh short positions against 4365 levels.

Prepared by

Finacademy Technical Team

Related Articles

US dollar index is bearish against 97.00

US dollar index is bearish against 97.00

The US dollar index might have carved a lower high around 96.50 mark on Tuesday. The index dropped through 95.80 levels on Wednesday before finding some support.

English